Wells Fargo will pay $105m to settle OC fraud case

SANTA ANA, Calif.  Wells Fargo Bank will pay $105 million to settle a lawsuit that held it liable for an Orange County fraud scheme that cost investors as much as $1 billion.

The Orange County Register says the settlement was filed Tuesday.

Wells and Bank of New York Mellon were trustees of investor funds for Tustin-based Medical Capital Holdings. MedCap claimed to sell safe investments but authorities say it gambled on risky ventures such as unlicensed hospitals.

Regulators closed the firm in 2009. Its president pleaded guilty to wire fraud.

The investor lawsuit claimed Wells Fargo and Mellon ignored warning signs that MedCap was a fraud. The banks argued that they followed the terms of their contracts.